GEICO reports largest cutback in ad spend for 2022

GEICO reports largest cutback in ad spend for 2022

The Berkshire Hathaway subsidiary reportedly spent $1.28 billion on advertising in 2022, about $800 million less than the previous year, as the parent company’s underwriting results were impacted by natural catastrophes and a spike in private auto claims became.

In 2022, Berkshire Hathaway’s insurance business reported an after-tax loss of $90 million, compared to after-tax income of $728 million and $657 million in 2021 and 2020, respectively.

GEICO’s cut enabled Progressive to become the largest ad spend company in 2022, S&P Global said, with its property-casualty subsidiaries accounting for a combined $1.73 billion in ad spend.

That 7.6% decrease from the previous $1.87 billion in ad spend in 2021 was part of Progressive’s efforts to meet its internal profitability target of 96% combined ratio, according to CEO Susan Griffith, who added, that the company will continue to evaluate its media spend efficiently in 2023.

Allstate’s ad spend is lowest among the Big Four

Allstate’s total advertising spend fell below $1 billion at about $950 million in 2022, down 26.9% from the prior year.

While not directly correlated to ad spend, the insurer saw a small year-over-year increase in its homeowner and personal auto lines in 2022, according to S&P Global.

A note in its most recent Form 10-K also revealed that Allstate’s number of policies in force could fall as it seeks to improve profitability through tariff promotions and a temporary reduction in its advertising spend.

Meanwhile, State Farm and its subsidiaries reportedly spent about $1.01 billion on advertising in 2022, S&P Global said, up from $1.07 billion in 2021 and a five-year high of $1.21 billion in 2019.

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